In March 2023, the Hungarian real estate market closed the quarter with 7,787 sales transactions, marking a 25% increase compared to February and the best month of the first quarter. Even so, the gradual increase in the number of transactions still resulted in only 19,893 sales in the quarter, the weakest first quarter performance in the last 10 years.
The last time Duna House estimated fewer transactions than this was in 2013, but we expect that activity will gradually increase in the second quarter of the year and transaction numbers on the domestic market will continue to rise. The expected moderation in house prices has finally arrived, with the national house price index showing a downward trend in both nominal and real terms. However, the trend varies by property type, with the indices of concrete block units showing signs of correction across the country with a larger fall following a sharp appreciation in the real estate index that occurred as a result of the utility cap, while the brick and mortar price index shows a more balanced picture in the capital, with the indicators in the East and in the West showing a rebound after the year-end fall.
According to Duna House’s demand index, buyers are gradually finding their way back into the property market following the year-end downturn, as house prices moderate and the possibility of a more significant bargain of between 4-9% nationally is becoming more apparent.
As far as investment purchases are concerned, buyers in Budapest signed contracts for houses and apartments of 54 sq. m. on average, with an average value of HUF 50.7 million. 43% of all real estate transactions in the capital were made as an investment, but in the country the share of these deals showed some decrease compared to last year.
In addition to pre-owned properties, the demand for new-builds has also picked up in the domestic property market. In the last quarter, there were 15 districts in the capital where prices of apartments in newly built projects exceeded HUF 1 million per sq. m. The most expensive district was District 1 in Buda, where the price per sq. m. in new development projects exceeded HUF 2.6 million. The highest supply in Q1 2023 was found in the new-build projects of Districts 9 and 11, in addition to District 13.
Following the pick-up in activity in the real estate market, the mortgage market has also started to gather speed as expected, with an estimated volume of HUF 39.5 billion last month, up 19% compared to February, according to domestic data from Credipass, the international financial brand of the Duna House Group. On a quarterly basis, based on actual data published by MNB (the National Bank of Hungary) and our March estimate, HUF 113.4 billion of residential mortgage loans were taken out, a 67% decrease compared to Q1 2022. With the housing market continuing to strengthen, experts expect the positive trend to continue in the credit market in the coming months.
With the exception of Western Hungary, the average loan size increased in all regions of the country compared to the previous quarter. In Budapest, the average loan amount exceeded HUF 19 million again, while in the country it was HUF 13-13.5 million. The volatile, rising interest rate environment has raised the financial awareness of buyers, with more and more of them opting for 10-year fixed interest rate schemes and taking advantage of the home loan subsidies available to them. Nationally, the share of applications for CSOK (the Family Home Allowance) submitted in conjunction with loan applications increased to 25.6% from 24.7% in the previous quarter, according to Credipass.


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